Inside Health

ECONOMIC SCENE; Free Lunch On Health? Think Again

By DAVID LEONHARDT

Published: August 8, 2007

The great hope of every health care reformer is that better care will mean cheaper care.

The three leading Democrats running for president have all put this idea at the center of their plans. Rudy Giuliani, the first Republican candidate to offer some health care ideas, has talked about it, too.

The theory goes like this: By practicing preventive medicine, doctors can keep many people from getting sick in the first place. Those who do end up with a chronic illness will be closely tracked so that fewer of them develop complications. These steps will result in less illness, which in turn will require less health care. With the savings, the country can then lower its medical bills or provide health insurance for the 40-odd million people who lack it -- or maybe even both.

The would-be reformers have hit on something important here. The current health care system doesn't pay hospitals, doctors and nurses to keep people healthy; it pays for tests, surgeries and drugs. So Americans often get expensive invasive care of dubious medical benefit while missing out on sensible basic care. Millions of other people go without any care for chronic illnesses like heart disease and diabetes. If Medicare and private insurers paid for more preventive care, Americans would be healthier than they are today and live longer.

But the current presidential candidates go one step further. They don't merely argue that preventive care delivers good bang for the buck. They argue that it delivers good bang for no bucks whatsoever. And this is where the candidates are overreaching.

No one really knows whether preventive medicine will save money in the long run, let alone free up the billions of dollars a year needed to help pay for universal health insurance. In fact, studies have shown that preventive care -- be it cancer screening, smoking cessation or plain old checkups -- usually ends up costing money. It makes people healthier, but it's not free.

''It's a nice thing to think, and it seems like it should be true, but I don't know of any evidence that preventive care actually saves money,'' said Jonathan Gruber, an M.I.T. economist who helped design the universal-coverage plan in Massachusetts.

This is a tough idea to swallow because better health really does seem as if it should lead to lower medical bills. Indeed, if it were somehow possible to wave a wand and turn people into thin nonsmokers who remembered to take their statins, this country's health care expenses would fall.

But any effort to promote health has its own costs. Doctors and nurses need to spend time with patients to persuade them to change their behavior. (Ever tried to get someone to stop smoking or drinking?) For a new program to work, it has to reach people who are not being helped by whatever exists now -- and who thus will be among the most difficult and expensive patients to treat. The program would also have to treat a whole lot of people who never would have gotten sick.

Jay Bhattacharya, a doctor and economist at Stanford's School of Medicine, estimates that to prevent one new case of diabetes, an antiobesity program must treat five people -- ''not cheaply,'' he says. Along the same lines, Mr. Gruber found that when retirees in California began visiting their doctor less often and filling fewer prescriptions, overall medical spending fell. People did get sick more often, but treating their illnesses was still less costly than widespread basic care -- in the form of doctors visits and drugs. Louise Russell, an economist at Rutgers, points out that programs that focus on at-risk patients cost the least, but even they are rarely free.

As Dr. Mark R. Chassin, a former New York state health commissioner, says, preventive care ''reduces costs, yes, for the individual who didn't get sick.''

''But that savings is overwhelmed by the cost of continuously treating everybody else.''

The actual savings are also not as large as might at first seem. Even if you don't develop diabetes, your lifetime medical costs won't drop to zero. You might live longer and better and yet still ultimately run up almost as big a lifetime medical bill, because you'll eventually have other problems. That would be an undeniably better outcome, but it wouldn't produce a financial windfall for society.

Certainly, there are examples of preventive care that can save money. As Mrs. Clinton has noted, Safeway and a handful of other companies have held down health costs by emphasizing prevention. (This, of course, is only over the short term.) Perhaps the best examples fall under the category of what Dr. Brent C. James calls ''do it right the first time.''

Dr. James is an executive at Intermountain Healthcare, a network of hospitals in Utah and Idaho that has saved money in recent years by reducing hospital infections and drug errors. Intermountain hospitals have also largely stopped inducing child labor for the sake of doctors' or parents' convenience. The hospital induces birth only for medical reasons -- and the number of babies that spend time in the neonatal intensive care unit has fallen.

It's this last example that holds the real key to cutting medical costs. I realize many people will react to the notion that preventive care usually costs money by saying, ''So what? We should do it anyway.'' And we should.

But by describing it as an easy win-win solution, the presidential candidates are gliding over an important part of the issue. Preventive care saves real money only when it replaces existing care that is expensive and doesn't do much, if any, good. There are plenty of examples of such care -- from induced labor to many lumbar surgeries and cardiac stent procedures.

The problem is that the people getting this care typically don't consider it wasteful. We all like to believe that other people are the ones getting the unnecessary care. We, on the other hand, are probably not getting enough treatment.

Persuading people otherwise -- persuading them that basic care is sometimes cheaper and better -- will be difficult. Sometimes insurance plans will simply have to say no to questionable care, over the opposition of doctors' groups with a financial interest in the status quo. But it's the only way to ''save money and improve quality and cover everybody,'' as Mrs. Clinton says.

She and her rivals, John Edwards and Barack Obama, deserve a lot of credit for laying out such detailed, promising reform plans. Mrs. Clinton has gone so far as to say that ''too much of the money we spend is wasted on care that doesn't improve health.'' But the candidates are still avoiding the toughest part of the discussion: when and how to say no.

''Fundamentally, if you're going to control health care costs, it involves denying people care they want -- or things they've been trained to think they want,'' Mr. Gruber says. ''There is no easy answer.''